How has the US economy changed since the approval of the first, second and third stimulus checks?



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The covid-19 pandemic has been characterized by extreme suffering and disease, but it will also be remembered a social protection system never seen before in the United States. Residents were bombarded with government checks to keep them afloat as the economy plummeted, receiving thousands of dollars in support.

Inevitably this led to profound changes in the US economy. Some of the most prominent features are a decrease in unemployment, prevention of food insecurity for many, but high levels of inflation.

First stimulus

The CAREs Act was enacted by President Trump on March 27, 2020.

A little after, the IRS quickly began handing out $ 1,200 stimulus checks. When the checks have been sent, the unemployment rate in the United States was 14.8%. In addition, at the end of April, 38% of respondents to the Household Pulse Survey (HPS) said they believed that they or a member of their household would lose income in the next four weeks.

At the beginning of May, many households had received their stimulus check. However, rates of food insecurity have not declined rapidly as a result. The HPS asks respondents if during the past seven days there was “sometimes or often not enough to eat”. In the six weeks after the first check was sent, about one in ten households reported being food insecure.

Families who experienced food insecurity in 2020

Dated Number of families (in percentage)
April 23 – May 5 9.8
May 7-12 10.6
May 14-19 10.8
May 21-26 9.9
May 28 – June 2 10.7
June 4-9 10.3

At the start of the pandemic, inflation fell to near zero, but rose steadily soon after. At the time of the second check, inflation was at 1.2%, well below the Federal Reserve’s target by 2 percent.

Unemployment has also started to fall. After skyrocket up to over 15 percent, the first stimulus check brought it down to 6.7%. This till was a huge increase from the level of less than 4 percent before the pandemic.

Second stimulus

In December 2020, Congress passed the Coronavirus Response and Relief Supplemental Appropriations (CRRSA) Act of 2021, which provided funding for send a $ 600 stimulus check.

By the time the second payment was made, households were in trouble.

In early December 2020, food insecurity reached an all-time high. Almost 20 percent of adults with children said they “sometimes or often†did not have access to enough food.

Besides, 35% said they struggled to cover their basic expenses. The size of the check being so much smaller than the first one, it didn’t have the same impact on people’s spending habits. At the end of January, the 35 percent figure remained unchanged.

Unemployment continued to fall, albeit much more slowly, from 6.7% to 6%. Inflation finally crossed the 2% threshold, dropping to 2.6% at the time of the third stimulus.

Third stimulus

Much larger than the second, the third stimulus check was President Biden’s first, totaling $ 1,400. This despite the promise of checks for $ 2,000 during his election campaign.

Researchers at the University of Michigan found that with the adoption of CRRSA and ARP, the difficulties, as reported by respondents, decreased sharply, especially among “adults with children and adults. living in households with an annual income of less than $ 25,000 â€. The downward trend has also been observed by those with higher incomes.

The third stimulus saw the highest inflation, reaching 5.4% at the time of publication, the highest in decades. This is now putting pressure on Americans’ bank accounts as their saved money quickly becomes less and less valuable. One bright spot has been the unemployment rate, which is just under 5%, almost to pre-pandemic levels.

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